Successful Supply Chain Selling: Invest in the Game

Automation and integration permeate the electronics industry supply chain. But how well integrated is your marketing connected to your suppliers and distributors?

Probably not as well as you would like. Fortunately, there are some simple and useful ways to strengthen your marketing links with your most important business partners.

Recommendations here presuppose that your company understands and agrees that dedicating business development funding to marketing activities that increase sales of your products, as well as supporting supply chain members' growth, is a good thing. A spirit of cooperation is the first step. Next, you need to create a concrete plan in concert with your marketing partner.

Program prerequisites
Planned activities must generate leads for your products and a percentage of these leads must turn into sales. Helping your top business channel partners create a planning structure is critical. Rather than accruing marketing funds on a percentage basis, I recommend the plan and partner reimbursement be based on merit on a case-by-case basis. An example of desirable partner participation criteria can include:

  • Contractual requirements
  • Revenue requirements
  • Implementing yearly or (at least) quarterly joint business plans
  • Attaining specified training requirements (people sell what they know)

Next, be very clear on which eligible products and/or services will be covered by the program. The process should be straightforward. For partners to qualify for the program they must meet the explicit requirements of a particular program level. Multi-level programs allow greater potential participation flexibility. Make it easier for your partners to get into the game in a variety of ways.

In addition, you should formalize partner participation. Use an application process for each desired business development activity to add essential structure. Working on a handshake basis is generally a bad idea. Create an online activity request form that's posted on your web partner site. Your sales and marketing team management should review plans, and as mentioned, approve based on merit of each proposal.

Approval must precede any marketing activity. Assigning a market development fund project or activity number within a reasonably short, specified time (e.g., 10 days) will help create good accounting practices. Requests that aren't approved and assigned a number should be considered rejected.

Timely execution on the part of the partner is also part of playing the market development funding game. Partners should execute approved marketing activities within a specified time frame (60 days is reasonable). Otherwise actions may lag or even fail to be performed. Partners' market development results should be documented as proof of performance and your company should keep invoices and records for at least a year.

Partner reimbursement
Time-proven best-practices for market development funding employ a reimbursement claim. This should include:

  • Reimbursement invoice or equivalent referencing the project approval number
  • Itemized list of expenses
  • Vendor prior approval forms if applicable
  • Marketing approval form mentioned earlier
  • Proof of performance documentation for the specified activity or program

While this may all, at first glance, seem like far too much work and structure to some, having these controls in place will help make administration and execution far more accountable and measurable. Your management wants demonstrable marketing return on investment (ROI). Create ways of delivering that or development funds will quickly disappear. Plan the work, then work the plan!

Check back for the next blog in this series. I'll be recommending ways of investing in joint marketing efforts that help move the needle for both your brand and your partners.

3 comments on “Successful Supply Chain Selling: Invest in the Game

  1. Hailey Lynne McKeefry
    September 20, 2013

    @Ford, thanks for this post…it's got great information. I'm wondering if there are any examples (good or bad) that you could tell us about epic success or failur in terms of program planning? (You can change the names to protect the innocent.)

  2. Ford Kanzler
    September 21, 2013

    My experience is its rarely done or done well. Its complicated managing marketing between two different businesses. As mentioned, a perspective of balanced benefit is essential within both organizations. From that point it still requires structure and planning.

    I recall Conner Perpherals (a giant disk drive makera acquired by Seagate) having a program that netted them greater exposure in the retail market. It was well policed. A significant investment was made and the payoff was getting a jump on one of their key competitors within a year. (Little in marketing occurs overnight even though management thinks it will.)

    Once upon a time I worked for a very well-funded consumer electronics start-up named Anova Electronics with a breakthrough integrated security product. The attempt was thrown together by sales management without effective controls. Lots of money disappeared without much in the way of results. I was managing marketing communications but not biz dev. Our corporate campaign was suffering underfunded PR and Ad budgets. Seeing the waste I finally got the CEO's attention on the problem but 10s of thousands went down the drain. I'm not typically a control freak but that experience made it clear that sound accounting was key to letting others spend your money. Its a bit like letting your general building contractor run free without clear budget limts at every phase. You WILL go WAY over your cost estimates.

  3. Hailey Lynne McKeefry
    September 23, 2013

    Wow, Ford… It's amazing that we haven't run into each other before–becasue i've worked at both those organizations or ones that are eerily like them. It does seem that doing anything well takes a certain level of time, attention, and care. Thanks for the examples!

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